the right way to fail with fuckup nights founder pepe villatoro

Most founders fear failure, but Pepe Villatoro has built a global movement proving it’s the most valuable teacher in business

The biggest fear in business isn’t competition, cashflow, or even bankruptcy – it’s failure. For most founders, the idea of screwing up carries a stigma so strong it can paralyse decisions before they’re made. Pepe Villatoro has spent the past decade trying to change that.

As co-founder of Fuckup Nights, he turned the taboo of failure into a movement. It began as a handful of entrepreneurs in Mexico standing up to share their mistakes. Now, it has become one of the world’s fastest-growing storytelling platforms, spanning more than 300 cities and trusted by organisations from Google to the World Bank. 

The concept of Fuckup Nights is simple: share your failures openly and turn them into lessons.

For Villatoro, it’s a philosophy. “Failure is not an identity,” he says. “You live through it, but it doesn’t define you.” In his view, learning how to fail and how to react to failure is one of the most important skills any entrepreneur can develop.

The punk version of TED

Fuckup Nights started as what Villatoro once called “the punk version of TED.” Raw, informal, and defiantly honest, it turned taboo into theatre: people standing on stage to recount the professional disasters most entrepreneurs prefer to hide.

The appeal, Villatoro says, is not in the mistakes themselves but in the emotions. “A transactional story of failure like ‘don’t hire a bad accountant’ doesn’t work. The power comes when people share how they felt, the conversations they had with their spouse, the fear they wouldn’t recover. That vulnerability builds empathy.”

That stubborn authenticity has made Fuckup Nights not just a viral movement but also a service. 

Today, Fortune 500 companies hire Villatoro’s team to create spaces of psychological safety – coaching leaders to share openly, helping managers break through shame, and teaching organisations how to build trust through honesty. “Managers won’t open up with HR,” Villatoro notes. “But with us, they do.”

Fear is a mile wide and an inch deep

Failure has always been part of business, but fear of failure is what keeps most people paralysed. Villatoro references a philosopher who, more than a century ago, described capitalism’s greatest burden as the fear of failure. He notes that the observation feels even more relevant today, in a world where social media makes every success look effortless and every setback feel like proof that you’re not enough.

We tend to inflate fear into a monster, yet Villatoro argues it’s rarely as deep as we imagine. “Fear is a mile wide and an inch deep,” he says – borrowing a phrase once used to describe America’s Platte River. You dread the investor call or the conversation with your team, but once you face it, the fear evaporates.

Failure isn’t an identity

Through stories at Fuckup Nights, Villatoro has seen patterns: those who recover view failure as a moment, not a measure. “Failure is not an identity. You go through a failure, you live through it, and that’s it. It doesn’t define you or your worth.”

He draws a contrast between two ways to fail:

• The wrong way: shame, hiding, ego.
• The right way: transparency, values, self-awareness.

When he was younger, Pepe admits he bought into the glossy definitions of success sold by magazines and Hollywood. Failure, in that mindset, was something to hide. Over time, he realised that the right way to fail has little to do with appearances and everything to do with self-awareness, values, and principles.

He also insists that failure shouldn’t be romanticised. It’s painful, and it certainly isn’t something to pursue for its own sake. But when mistakes come from good intent and are aligned with one’s values – what he calls “educated trying” – they become moments worth acknowledging, even celebrating.

Designing a life at the speed of trust

For Villatoro, failure and trust are inseparable. His philosophy, he says, is “doing business at the speed of trust.” That requires self-knowledge. “If you haven’t asked what you truly value and you just want to be the next Elon Musk, guess what? Elon is the best at being Elon. You’ll lose trust because you’re not authentic.”

His framework is pragmatic:

• Distinguish reversible and irreversible decisions.
• Take risks when the downside is limited.
• Practice educated trying, not reckless gambling.
• Choose the right people over fast growth.

And above all, Villatoro urges founders to resist hustle culture, the glorified exhaustion of working 18-hour days and wearing burnout as a badge of honour. It may drive short-term results, he admits, but it’s ultimately toxic. Real performance, he believes, comes from protecting your physical, emotional, and spiritual energy and from learning to pause before reacting.

He also reminds leaders that culture is legacy. Build a company fuelled by overwork and that’s the life you inherit. Build one grounded in balance and clarity and that becomes the mark you leave behind.

Three rules for failing better

“People can only live to the fullest if they are not afraid of failure,” Villatoro says. “Because when you’re not afraid, you allow yourself to try and to try better.”

For those in the middle of failure, he offers no grand theories, only grounded advice:

• Think about what you’ll feel about today’s crisis ten years from now – chances are you’ll laugh.
• Act as if your decisions will be printed in tomorrow’s newspaper.
• Protect your reputation; it’s your biggest asset.

Beyond this episode: community without borders

At its core, Fuckup Nights is about community: spaces where vulnerability is rewarded with trust. Villatoro sees the same spirit in e-⁠Residency of Estonia. 

Both movements, he argues, democratise entrepreneurship: lowering barriers, shrinking fears, and proving that opportunity multiplies when communities cross borders. Just as Fuckup Nights gives founders permission to be human, e-⁠Residency shows how governments can build communities that thrive beyond geography.

Winning Friends is a podcast powered by e-Residency of Estonia, hosted by Logan Merrick and Dylan Hey. Each episode explores how entrepreneurs around the world build borderless businesses, design communities, and turn setbacks into growth.

Want to dig deeper into how global entrepreneurs are building borderless businesses safely? Don’t miss our article on the e-⁠Residency programme, a way for founders around the world to launch, run, and scale companies with European access, no matter where they live.